Food processors and retailers would do well to prepare for the effects of the end of enhanced food assistance, says an IRI executive.
Sally Lyons Wyatt, IRI’s practice leader for food and beverage, told CNBC that processors and grocers should come up with new strategies to attract shoppers with suddenly constricted means. Possibilities include single-serve portions, inexpensive versions of meal kits, and a renewed emphasis on value items like private-label goods.
IRI estimates that enhanced benefits for the Supplemental Nutrition Assistance Program (SNAP), aka food stamps, amounted to $3 billion a month extra that was being spent on food – and that is no longer available as of September. In addition, government stimulus checks have mostly been spent. The result is less money for food available to many struggling households.
Shoppers using SNAP are responsible for about 12% of overall U.S. food and beverage sales, according to IRI. SNAP users drove 19% of the dollar growth in food retailing that took place in the 52 weeks ending Sept. 5 over the prior period, IRI estimates; only 1% of that growth came from non-SNAP users.
Lyons Wyatt noted that reaching out to SNAP households is good business strategy; SNAP shoppers tend to be more loyal to stores and brands, and they often have children who are forming their own loyalties. “You will set yourself up for a lifetime consumer value proposition that might not be there if you just don’t take an interest,” she said.
